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By Julie Zhu and Selena Li HONG KONG (Reuters) – Tencent Holdings Ltd plans to raise its stake in French video game group Ubisoft Entertainment SA as the Chinese gaming giant pivots to the global gaming market, four sources with direct knowledge of the matter told Reuters. China’s largest social network and gaming firm, which bought a 5% stake in Ubisoft in 2018, has reached out to the French firm’s founding Guillemot family and expressed interest in increasing its stake in the firm, the sources said. It is not clear how much more Tencent wants to own in Ubisoft, valued at $5.3 billion, but Tencent aims to become the single largest shareholder of the French company with an additional stake purchase, two of the sources said, speaking on condition of anonymity. Tencent is hoping to buy a part of the additional stake in Ubisoft, the maker of the blockbuster “Assassin’s Creed” video game franchise, from the Guillemot family, which owns 15% of the firm, three of the sources said. Tencent could offer up to 100 euros ($101.84) per share to acquire the additional stake, two of the sources with knowledge of the internal discussions, said. It paid 66 euros per share for the 5% stake in 2018. Details of the deal are not yet finalised and are subject to change, the sources said. Ubisoft shares surged 21% after the Reuters report at 1008 GMT and were set for their biggest daily rise since 2004. Shares in Guillemot Corp SA, the holding company in which the Guillemot family owns the majority shareholding, were trading up 10.3% at 1240 GMT and were set for their biggest daily jump since January. GRAPHIC: Ubisoft set for biggest daily jump since 2004 (https://graphics.reuters.com/TENCENT-INVESTMENT/dwpkrwdggvm/chart.png) Tencent will also seek to acquire shares from public shareholders of Ubisoft, two of the sources said, in a bid to boost its ownership and become the single-largest shareholder. About 80% of the French firm’s shares are owned by public shareholders, according to its latest annual report. All the sources declined to be named as they are not authorised to speak to the media. Tencent and Ubisoft declined to comment. Representatives of the Guillemot family could not be immediately reached for comment. The planned stake purchase, Tencent’s latest major foreign deal since a regulatory crackdown in late 2020, will help it offset some of the pressures in the domestic gaming market. China’s video games market, the world’s largest, has become fiercely competitive. “Tencent is very determined to nail down the deal as Ubisoft is such an important strategic asset for Tencent,” one of the people said. At the top end of 100 euros per share, Tencent’s offer will be a premium of 127% to the stock’s 44 euros average price over the past three months, and is close to its historical price ceiling at 108 euros in 2018. Tencent has submitted to the Guillemot family a term sheet – a non-binding offer describing the basic terms and conditions of an investment – with a price “way above” the company’s current price to ward off potential competition, one of the sources said. The aggressive offer comes as global gaming power houses have been rushing to snap up quality independent game makers in recent years, which are in scarcity, two of the sources said. Tencent’s senior executives flew to France in May to meet the Guillemot family about the purchase, two of the people said. DOMESTIC PRESSURES China’s gaming regulator has not granted any new game licences to Tencent at home since June last year, before it froze gaming approvals for nearly nine months. Since it resumed approvals in April this year, none of the past four batches included the company. In May, Tencent reported that its domestic game revenue dropped 1% in the first quarter while international game revenue rose 4%. Tencent, which has stakes in U.S. video game developers Epic Games and Riot Games, said in June it would release its flagship mobile game “Honor of Kings” globally by the end of the year. In 2016, it bought a majority stake in “Clash of Clans” mobile game maker Supercell for roughly $8.6 billion, one of the world’s biggest ever gaming deals. It also owns 9% of UK video gaming firm Frontier Developments and said last year it would buy another British developer Sumo in a $1.3 billion deal. Ubisoft, whose titles also include “Prince of Persia” and “Rainbow Six”, in May forecast lower operating profit for 2022-23 after the company reported operating income for 2021-22 that missed estimates. ($1 = 0.9819 euros) (Additional reporting by Pamela Barbaglia in London, Sudip Kar-Gupta and Richard Lough in Paris; editing by Sumeet Chatterjee, Jason Neely and David Evans)

2022 08 04T132213Z 1 LYNXMPEI730OW RTROPTP 4 ASIA PELOSI - Global Banking | Finance

By Yimou Lee and Sarah Wu

TAIPEI (Reuters) – China deployed scores of planes and fired live missiles near Taiwan on Thursday in its biggest-ever drills in the Taiwan Strait, a day after U.S. House of Representatives Speaker Nancy Pelosi made a solidarity trip to the self-ruled island.

China’s military confirmed multiple firings of conventional missiles in waters off Taiwan as part of planned exercises in six zones set to run until noon on Sunday. It activated more than 100 planes, including fighter jets and bombers, and over 10 warships, state broadcaster CCTV said.

Taiwan’s defence ministry said it scrambled jets to warn away 22 Chinese fighter aircraft that crossed the Taiwan Strait median line into its air defence zone, while Japan protested that five missiles appeared to land in its economic zone.

“The U.S.-Taiwan collusion and provocation will only push Taiwan towards the abyss of disaster, bringing catastrophe to Taiwan compatriots,” said a Chinese defence ministry spokesperson.

Responding to the Chinese drills, President Tsai Ing-wen said Taiwan would not provoke conflicts but would firmly defend its sovereignty and national security.

“Taiwan will never be knocked down by challenges,” Tsai said in a recorded video message to the people of Taiwan.

“We are calm and not impetuous, we are rational and not provocative, but we will also be firm and not shirk.”

Taiwan said 11 Chinese Dongfeng ballistic missiles had been fired in nearby waters – the first time since 1996.

Taiwan officials said the drills violated United Nations rules, invaded its space and threatened free air and sea navigation. It has been self-ruled since 1949, when Mao Zedong’s communists took power in Beijing after defeating Chiang Kai-shek’s Kuomintang (KMT) nationalists in a civil war, prompting the KMT-led government to retreat to the island.

The military activity followed Pelosi’s unannounced visit of support to Taiwan in defiance of warnings from China.

Before the drills officially began, Chinese navy ships and military aircraft briefly crossed the Taiwan Strait median line several times on Thursday morning, a Taiwanese source briefed on the matter told Reuters.

By midday, warships from both sides remained in close proximity as Taiwan also scrambled jets and deployed missile systems to track Chinese aircraft crossing the line.

“They flew in and then flew out, again and again. They continue to harass us,” the Taiwanese source said.

China, which has long said it reserves the right to take Taiwan by force, says its differences with the island are an internal affair.

In Taiwan, life was largely normal despite worries that Beijing could even fire a missile over the main island as North Korea did over Japan’s northern island of Hokkaido in 2017.

“When China says it wants to annex Taiwan by force, they have actually said that for quite a while,” said Chen Ming-cheng, a 38-year-old realtor. “From my personal understanding, they are trying to deflect public anger, the anger of their own people, and turn it onto Taiwan.”

Taiwan said that websites of its defence ministry, foreign ministry and the presidential office were attacked by hackers, and warned of coming “psychological warfare”.

‘COMRADE PELOSI’

Chinese Foreign Minister Wang Yi called Pelosi’s visit to Taiwan a “manic, irresponsible and highly irrational” act, state broadcaster CCTV reported.

Wang, speaking at a meeting of Southeast Asian foreign ministers in Cambodia, said China had tried to avert crisis by diplomatic means but would never let its core interests be hurt.

Unusually, the drills in six areas around Taiwan were announced with a locator map circulated by China’s official Xinhua news agency – a factor that for some analysts illustrated playing to both domestic and foreign audiences.

In Beijing, security near the U.S. Embassy was unusually tight though there were no signs of significant protests.

“I think this (Pelosi’s visit) is a good thing,” said a man surnamed Zhao in Beijing. “It gives us an opportunity to surround Taiwan, then to use this opportunity to take Taiwan by force. I think we should thank Comrade Pelosi.”

Pelosi, the highest-level U.S. visitor to Taiwan in 25 years, praised its democracy and pledged American solidarity during her brief stopover. Chinese anger could not stop world leaders from travelling there, she said.

“Our delegation came to Taiwan to make unequivocally clear that we will not abandon Taiwan,” Pelosi told Taiwan’s President Tsai Ing-wen, whom Beijing suspects of pushing for formal independence – a red line for China.

China summoned the U.S. ambassador in Beijing in protest and halted several agricultural imports from Taiwan.

The United States and the foreign ministers of the Group of Seven nations warned China against using Pelosi’s visit as a pretext for military action against Taiwan.

The United States has no official diplomatic relations with Taiwan but is bound by U.S. law to provide it with the means to defend itself. Taiwan rejects China’s sovereignty claims, saying only the islanders themselves can decide their future.

(Reporting by Yimou Lee and Sarah Wu; Additional reporting by Tony Munroe, Ryan Woo and Martin Quin Pollard in Beijing and Fabian Hamacher in Taipei; Writing by Raju Gopalakrishnan, William Maclean; Editing by Simon Cameron-Moore, Angus MacSwan and Bernadette Baum)

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